PSX commences week with 1% slide

The Pakistan Stock Exchange (PSX) commenced the week with a stark downturn on Monday, as the benchmark KSE-100 index succumbed to selling pressure, shedding nearly 1,750 points to close around 172,200.

The 1% decline effectively wiped out the recent momentum, largely driven by a cautious global atmosphere and escalating geopolitical tensions. At the close of trading, the KSE-100 posted a loss of 1,742.31 points, or 1%, and settled at 172,196.70.

Arif Habib Limited (AHL) noted that Pakistan's stock market experienced a downward trend as the KSE-100 declined by 1,742 points. The dip was largely attributed to mixed news surrounding the second round of peace talks.

Despite the overall decline, market breadth remained positive with 78 shares rising against 21 falling. Notable gainers included UBL (+2.2%), Bank Alfalah (+3.22%), and NBP (+1.38%), while Fauji Fertiliser Company (-1.81%), HBL (-3.11%), and Hubco (-2.39%) acted as the primary drags on the index. Trading activity remained robust, with a total traded volume of 1,296.2 million shares and the capitalisation standing at Rs19,060.1 billion ($68.3 billion).

On the corporate front, Sazgar Engineering reported a record-breaking 3QFY26 profit. It posted 9MFY26 earnings per share (EPS) of Rs246.15 (up 16% year-on-year) and a dividend of Rs50, though its stock price saw a slight dip of 0.27%, stated AHL. Similarly, Engro Fertilisers posted 1QCY26 EPS of Rs2.49 and dividend per share of Rs2, beating market expectations. However, its share price declined 2.01%.

In terms of specific stock performance, Javedan Corporation led the top gainers with a 4.60% increase, while Sui Southern Gas Company was the top loser, falling 4.69%. Looking ahead, analysts maintain that strong demand and further developments in peace negotiations will be the key drivers for a potential market rally. Topline, in its market review, commented that the local bourse commenced trading on a subdued note, reversing the previous session's upward momentum, with the benchmark index declining to the intra-day low of 4,712 points.

Investor sentiment remained cautious amid escalating geopolitical tensions. Concerns intensified following reports that the US seized an Iranian-flagged cargo vessel in the Strait of Hormuz, while Iran signalled that no further round of talks was currently planned. Earlier indications of potential diplomatic engagement were overshadowed by these developments.

The market failed to stage a sustained rebound and closed in negative territory at 172,196, down 1,742 points, or 1%. Index-heavy stocks, including FFC, HBL, Hubco, Lucky Cement, and Engro Holdings, remained under significant selling pressure, collectively dragging the benchmark index down by 905 points, Topline said.

KTrade commented that the KSE-100 lost ground as rising geopolitical tensions weighed on overall sentiment. Over the weekend, friction between the US and Iran escalated following dispute over a reported blockade, which Iran termed illegal, keeping regional risk appetite subdued. This was reflected in the energy market, where Brent crude opened higher near $97-98 per barrel, before easing to around $95-96, contributing to a weak start at the exchange. Overall trading volumes for the regular market were recorded at 1.29 billion shares compared with the previous session's tally of 1.44 billion.

Shares of 488 companies were traded in the ready market. Of these, 138 stocks closed higher, 319 fell, and 31 remained unchanged.

The Bank of Punjab was the volume leader with trading in 120.8 million shares, losing Rs0.41 to close at Rs36.60. It was followed by Unity Foods with 92.4 million shares, gaining Rs1.04 to close at Rs11.40, and K-Electric with 85.6 million shares, losing Rs0.32 to close at Rs7.89. Foreign investors bought shares worth Rs226.9 million, the National Clearing Company reported.